Investment Property Calculator
Underwrite a rental with realistic assumptions.
What this calculator helps you estimate
This calculator estimates monthly and annual cash flow, cap rate, cash-on-cash return, and debt-service coverage ratio (DSCR) for a rental property.
Analyze a rental property the way lenders and investors do — with a real income statement, operating expenses, and standard investment metrics.
Inputs
Property details
Results
Investment metrics
Interpretation
This property produces negative estimated cash flow under the assumptions entered. A DSCR of 0.98 means NOI covers debt service less than in full.
Cap rate, DSCR, and CoC returns should be evaluated against your market and investment goals.
Understand the math
How this calculator works
Investors underwrite differently than owner-occupants — the property itself has to make sense financially. This calculator produces the core investment metrics lenders and investors rely on: cap rate, cash-on-cash return, and DSCR, from realistic rental income and operating expenses.
Worked example
$350,000 purchase price, $2,800/month rent, monthly expenses of $350 taxes, $120 insurance, 8% management ($224), $150 maintenance, 5% vacancy ($140); 25% down, 7% rate, 30-year term.
- Total monthly operating expenses = $350 + $120 + $224 + $150 + $140 = $984
- Net operating income (NOI) = $2,800 − $984 = $1,816/month → $21,792/year
- Cap rate = $21,792 ÷ $350,000 = 6.23%
- Loan = $262,500; estimated P&I ≈ $1,746.42/month → annual debt service ≈ $20,957
- DSCR = $21,792 ÷ $20,957 ≈ 1.04; annual cash flow ≈ $835; cash-on-cash ≈ 0.95% on $87,500 down
Cap rate ≈ 6.2%, DSCR ≈ 1.04, modest positive cash flow of roughly $70/month.
How to read your results
Interpretation guidance
- A DSCR near 1.0 means rental income roughly covers the mortgage payment alone — many lenders and investors look for a comfortable cushion above that.
- Cap rate ignores financing entirely, so it's useful for comparing properties independent of how they're financed.
- Cash-on-cash return reflects the actual return on the cash you invested, factoring in your specific loan terms.
- Small changes in vacancy or management assumptions move NOI meaningfully — stress-test the numbers before committing.
Deeper answers
More questions about this calculator
What is a good cap rate?
Cap rates vary by market, property type, and risk profile. In many U.S. markets, residential rentals commonly trade in the 4%–8% range, but this is a general observation, not a guideline.
What DSCR do lenders require?
DSCR requirements vary by program. Many DSCR loan programs target 1.0 to 1.25 or higher. Actual minimums vary by lender, LTV, and loan size.
Does NOI include the mortgage payment?
No. Net operating income (NOI) is effective gross income minus operating expenses, and does not include mortgage principal and interest. DSCR then divides NOI by annual debt service.
Why is my cash-on-cash return lower than my cap rate?
Cap rate ignores financing costs, while cash-on-cash return measures profit against only the cash you invested after accounting for the mortgage payment — leverage can raise or lower it depending on the deal.
Results are estimates for educational purposes only and are not a commitment to lend, loan approval, or official Loan Estimate. Actual rates, payments, costs, taxes, insurance, mortgage insurance, eligibility, and loan terms may vary.
Related calculators
Related loan programs
Answers
Frequently asked questions
What is a good cap rate?
Cap rates vary by market, property type, and risk profile. In many U.S. markets, residential rentals commonly trade in the 4%–8% range, but this is a general observation, not a guideline.
What DSCR do lenders require?
DSCR requirements vary by program. Many DSCR loan programs target 1.0 to 1.25 or higher. Actual minimums vary by lender, LTV, and loan size.
Does NOI include the mortgage payment?
No. Net operating income (NOI) is effective gross income minus operating expenses, and does not include mortgage principal and interest. DSCR then divides NOI by annual debt service.
Next step
Numbers are helpful. A personalized strategy is better.
Review your scenario with a Vabasso mortgage expert. No pressure, no obligation — just clear guidance for your next move.